Source: Consumers United for Rail Equity

The division on antitrust law within the American Bar Association has endorsed ending the special antitrust exemptions being exploited by the nation's major freight railroads, putting the nation's premier law organization firmly on the side of American consumers.

The ABA's Section on Antitrust Law has asked the leadership of the House and Senate to pass the Railroad Antitrust Enforcement Act, H.R. 1650 in the House and S. 772 in the Senate. The legislation would end the major railroads' broad exemption from the nation's antitrust law, to which all other U.S. businesses must adhere. The current exemption allows railroads to avoid competition and keep their shipping rates artificially and unfairly high, creating higher prices for U.S. consumers on a vast array of goods and services.

"The legal experts of the Antitrust Section of the ABA are considered the foremost authorities in the United States on matters of antitrust law," said Rep. Tammy Baldwin (D-Wis.), who authored the House version of the antitrust reform legislation. "Their support for this legislation reinforces the need for quick action on rail reform. I look forward to working with these ABA experts in the next session of Congress to provide much-needed relief to shippers and consumers."

The ABA Section presented to the House and Senate leadership a 13-page analysis of the legislation, which concludes that "the changing nature of the rail industry justifies a corresponding change in the way allegedly anticompetitive activity among railroads is addressed" and that the group "encourages Congress to move forward quickly to dismantle the antitrust exemption for the railroad industry, through the Railroad Antitrust Enforcement Act."

"We are gratified that the ABA Antitrust Section is supporting our legislation to repeal the railroad industry's antitrust exemption," said Senator Herb Kohl (D-Wis.), author of the Senate bill and chairman of the Antitrust Subcommittee of the Senate Judiciary Committee. "The ABA recognizes, as do I, that this outdated exemption is unjustified, denies shippers and consumers needed antitrust remedies, drives up the cost of shipping and should be repealed."

The Railroad Antitrust Enforcement Act would repeal the railroad exemptions in the antitrust and transportation statutes and permit the Justice Department and the Federal Trade Commission to review mergers under antitrust law. It has passed both the House and Senate Judiciary Committees by bipartisan voice votes.

"With our expanding coalition of groups in support of reform legislation, it is getting progressively harder for the big railroads to hide behind their empty rhetoric and expensive lobbying and advertising campaigns," said Bob Szabo, Executive Director of Consumers United for Rail Equity. "Our chances of passing this important legislation in 2009 are better than ever."